Reading Condo Budgets In River North: What To Check

Buying a River North condo? The monthly assessment is only part of the story. In high-rise buildings, the real costs often show up in the homeowners association budget and reserves. If you want predictable ownership and fewer surprises, you need to know how to read those numbers. In this guide, you’ll learn what to request, what to look for, and when to ask deeper questions so you can buy with confidence. Let’s dive in.

Why budgets matter in River North

River North is packed with mid- and high-rise condominiums, which rely on complex building systems. Big-ticket items like façades, windows, roofs, elevators, boilers and central HVAC, plumbing risers, and waterproofing drive long-term costs. When these components need work, associations often draw heavily on reserves or levy special assessments.

Chicago’s Façade Inspection Safety Program requires periodic exterior inspections for taller buildings. Findings can require repairs and filings that impact reserves or assessments. Lenders and insurers also review a building’s financial health, so weak reserves or repeated special assessments can affect your financing options and future resale.

The bottom line is simple. You need to evaluate both the current monthly assessment and the association’s plan to fund foreseeable capital work.

Core documents to request

Ask for these items early in your contract review period. Each one reveals a key piece of the financial picture.

• Current year operating budget, plus the most recent balance sheet and year-to-date P&L
• Most recent reserve study and any updates
• Reserve fund bank statements and any restricted account statements
• Board and annual meeting minutes for the past 12 to 24 months
• Reserve funding policy, if separate
• List of pending or recent capital projects with contracts or estimates
• Notices of any pending or recent special assessments
• Owner delinquency report and collection policy
• Insurance declarations for the master policy and fidelity bond
• Current management contract and major vendor contracts
• Litigation disclosures and related minutes or invoices
• Occupancy and rental statistics, if available
• Recent façade inspection and municipal filings for buildings subject to Chicago’s program

How to read the operating budget

Revenue lines to scan

Review monthly assessments first. Then look for interest or dividends on reserves, late fees, parking or rental income, and other fees. Note any non-recurring income, such as insurance recoveries, and avoid assuming it will repeat.

Expenses and maintenance

Check recurring operating costs like management, janitorial, utilities, insurance, and legal fees. Review maintenance and repairs for trends, not just single-year totals. Big cuts to routine maintenance while major projects are scheduled can be a red flag.

Operating vs capital

Routine upkeep should sit in the operating budget. Larger capital projects should be funded by reserves or a planned special assessment, not lumped into operations. If you see operating shortfalls covered by reserve transfers, ask why.

One-time items

Identify one-off expenses or windfalls and remove them from your mental forecast. You want a clean view of what the building spends in a typical year.

Reserve study and percent funded

What a reserve study is

A reserve study lists major common components, estimates useful life and replacement cost, and sets a recommended contribution schedule. It is the roadmap for predictable funding of big projects.

Percent funded defined

The percent funded metric compares current reserves to the ideal target derived from the study. Formula: current reserve balance divided by the fully funded target, times 100. Example: $250,000 in reserves divided by a $500,000 fully funded target equals 50 percent funded.

How to interpret levels

In general terms, 60 to 100 percent funded is often viewed as healthy to conservative, 30 to 60 percent is moderate risk, and under 30 percent can be elevated risk. Context matters. A newer building might be fine with a lower percentage if major replacements are far off. An older high-rise with near-term projects should be closer to fully funded.

Funding strategies and red flags

Common funding approaches

Associations typically use level funding, baseline funding, fully funded planning, or a hybrid. Compare the budgeted contribution to what the reserve study recommends and ask how the board plans to close any gap.

Red flags in the numbers

• No reserve study or one older than five years
• Reserve balance covering only a small fraction of imminent projects
• Operating shortfalls covered by reserve transfers
• Repeated special assessments for the same systems
• Large, unexplained reserve deposits or withdrawals
• Unrealistically low budgeted reserve contributions versus study recommendations

Trends to watch

• Assessment trend: double-digit increases year over year merit deeper review
• Special assessments: frequency, size per unit, and whether they reflect deferred maintenance
• Delinquency rate: under 5 percent is generally healthy, 5 to 10 percent warrants attention, above 10 percent is concerning
• Owner and renter mix: higher investor concentration can influence funding decisions and compliance

Typical River North projects and costs

Expect to see line items for façade or masonry work, window replacements, roofing, elevator modernization, boiler or central HVAC upgrades, plumbing riser replacement, waterproofing, garage or parking deck repairs, life-safety upgrades, and accessibility improvements. In larger buildings, these projects can range from tens of thousands to multiple millions for the association. In practice, they are often funded through multi-year reserve draws or special assessments. Façade work is especially relevant due to Chicago’s inspection program.

Buyer checklist to use now

Work through this list as you review the association’s packet.

• Operating budget, P&L, balance sheet
  • Do assessments cover operating costs without tapping reserves each year?
  • Any big, unexplained swings versus the prior year?
• Reserve study and updates
  • Date of the study and last update
  • Compare recommended annual contribution to the budgeted amount
  • Timing and condition of high-cost components like roof, façade, and elevators
• Reserve bank statements
  • Separate, restricted accounts for reserves
  • Transparent transfers with clear purpose
• Board minutes for 12 to 24 months
  • Discussion of large projects, assessments, litigation, or contractor issues
• Special assessment notices and history for 5 to 10 years
  • Frequency, amounts, and reasons
• Delinquency report
  • Current percentage and whether a few units account for most arrears
• Insurance declarations and fidelity bond
  • Adequate coverage for property, liability, boiler and machinery, directors and officers, and fidelity
• Vendor contracts and recent warranties
  • Terms, expiration, and scope
• Litigation disclosures
  • Pending suits, city violations, contractor or insurance claims
• Occupancy and rental data
  • Investor concentration or rental caps that may affect stability
• Façade inspection filings
  • Any required repairs and the funding plan

When to escalate and who to involve

Bring in additional experts when the documents raise material questions.

• Real estate attorney with Illinois condo experience for disclosure review, assessment implications, and record access rights
• CPA or forensic accountant for irregular accounting, unexplained transfers, or suspected misappropriation
• Reserve specialist if the study is missing, outdated, or appears unrealistic
• Structural engineer or building envelope consultant for façade, structural, or scope validation, especially after adverse inspection findings
• Property management consultant for contract and service level concerns
• Your lender early in the process if financing may hinge on project-level approval

Timing, strategy, and comparisons

Request budgets, reserves, and minutes as soon as you enter the document review period. Use contract contingencies to verify funding plans and quantify upcoming costs. If concerns are significant, consider a seller credit, an escrow holdback, or a contingency tied to a defined resolution.

Compare the association’s health to similar River North buildings with comparable age, height, and amenities. A building with noticeably lower assessments but thin reserves or a history of special assessments may carry hidden risk.

Final take

Do not fixate on the current monthly assessment. Focus on the reserve study, percent funded, and the timing of major projects. Treat outdated studies, low funding levels, repeated assessments, and high delinquency as signals to dig deeper before you commit.

If you would like a calm, expert walkthrough of a building’s budget and reserves as you evaluate River North options, reach out to Rachna Jain for tailored guidance aligned with your goals.

FAQs

What is a condo reserve study and why it matters in River North?

• A reserve study maps major building components, their remaining life, and future replacement costs so the association can plan contributions and avoid surprise assessments.

How do I calculate percent funded for a condo association?

• Divide the current reserve balance by the fully funded target from the reserve study, then multiply by 100, for example $250,000 ÷ $500,000 equals 50 percent funded.

How does Chicago’s façade program affect a condo’s budget?

• Required inspections can mandate exterior repairs and filings that draw on reserves or prompt special assessments, which should be reflected in board minutes and funding plans.

What condo delinquency rate should concern a buyer?

• Under 5 percent is typically healthy, 5 to 10 percent needs attention, and above 10 percent is concerning since it can strain cash flow and lead to higher assessments.

What should I do if a special assessment is announced before closing?

• Review the scope, cost, and payment schedule, then consult your attorney to address options such as credits, escrow holdbacks, or contingency language in the contract.